The Company, which serves commercial and individual clients across
"We are extremely encouraged by our achievements in the third quarter of 2023, as our strategic initiatives have continued to bear fruit in several critical areas," stated H. Charles Maddy III, President and Chief Executive Officer of
Key Highlights for the Third Quarter of 2023
Summit Financial Group, Inc. entered into an Agreement and Plan of Reorganization with Burke & Herbert pursuant to which Summit will merge with and into Burke & Herbert, with Burke & Herbert as the surviving entity. Immediately following the Merger,Summit Community Bank, Inc. , Summit’s wholly owned banking subsidiary, will be merged with Burke & Herbert’s wholly-owned banking subsidiary, Burke & Herbert Bank & Trust Company, withB&H Bank the surviving bank. The transaction is expected to close in Q1 2024.- Our net interest margin (“NIM”) decreased 1 basis point to 3.88 percent from the linked quarter and increased by 4 basis points from the prior-year quarter.
- Summit's core deposits experienced modest growth in the third quarter of 2023, up 1.1 percent from the linked quarter, showcasing customer confidence and a robust deposit base.
- The third quarter saw a modest increase in total loans, excluding mortgage warehouse lines of credit and acquired loans, registering an increase of 1.47 percent (5.87 percent annualized). This performance was further underscored by a year-over-year growth of 4.87 percent, a testament to our successful lending approach and effective customer acquisition.
- The Company’s provision for credit losses totaled
$1.25 million in the third quarter of 2023 compared to$8.00 million in the linked quarter. Included in the Company’s Q2 2023 provision for credit losses was$3.01 million to establish an allowance on non-PCD loans acquired from PSB in accordance with the Current Expected Credit Loss accounting standard and$3.66 million to recognize an allowance on a nonperforming commercial real estate loan participation. - Summit achieved an efficiency ratio of 47.15 percent, a marked improvement from 47.90 percent in the linked quarter, indicating optimized use of resources.
- Annualized non-interest expense ratio decreased to 2.10 percent of average assets from 2.41 percent in the previous quarter and increased from 2.01 percent in the same quarter last year. Excluding acquisition-related expenses, annualized non-interest expense would have been 2.01 percent of average assets in Q3 2023 and 2.05 percent of average assets for Q2 2023.
Results from Operations
Net interest income totaled
Summit recorded a
Noninterest income, consisting primarily of service fee income from community banking activities and trust and wealth management fees, for third quarter 2023 was
Total noninterest expense decreased to
Salary and benefit expenses were
Acquisition-related expenses were
Summit’s efficiency ratio improved, registering 47.15 percent in the third quarter of 2023, a decrease from 47.95 percent in the third quarter of 2022, and marginally better than the 47.90 percent in the linked quarter. Concurrently, the non-interest expense to average assets ratio was optimized to 2.10 percent, compared to 2.41 percent in the previous quarter, indicating enhanced operational efficiency despite the expanded asset base post-PSB acquisition.
Balance Sheet
As of
Total loans net of unearned fees increased to
Total commercial loans, including commercial and industrial (C&I) and commercial real estate (CRE), increased 0.3 percent (1.1 percent annualized) during the third quarter to
Residential real estate and consumer lending totaled
As of
Deposits totaled
Total shareholders’ equity was
Tangible Book Value Per Share (“TBVPS”) increased by
As announced in the first quarter of 2020, the Board of Directors authorized the open market repurchase of up to 750,000 shares of the issued and outstanding shares of Summit's common stock, of which 323,577 shares have been repurchased to date. The timing and quantity of stock purchases under this repurchase plan are at the discretion of management. During the third quarter of 2023, no shares of Summit’s common stock were repurchased under the Plan.
Asset Quality
The Company recorded net loan charge-offs (“NCOs”) of
Summit’s allowance for loan credit losses was
Summit’s allowance for credit losses on unfunded loan commitments was
As of
About the Company
Non-GAAP Financial Measures
In addition to the results of operations presented in accordance with Generally Accepted Accounting Principles (GAAP), Summit’s management uses, and this press release contains or references, certain non-GAAP financial measures, such as tangible common equity/tangible assets; efficiency ratio; return on average tangible equity and return on average tangible common equity. Summit believes these financial measures provide information useful to investors in understanding our operational performance and business and performance trends which facilitate comparisons with the performance of others in the financial services industry. Although Summit believes that these non-GAAP financial measures enhance investors' understanding of Summit’s business and performance, these non-GAAP financial measures should not be considered an alternative to GAAP or are they necessarily comparable to non-GAAP performance measures presented by other companies.
Forward-Looking Statements
This press release contains comments or information that constitute forward-looking statements (within the meaning of the Private Securities Litigation Act of 1995) that are based on current expectations that involve a number of risks and uncertainties. Words such as “expects”, “anticipates”, “believes”, “estimates” and other similar expressions or future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify such forward-looking statements.
Although we believe the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially. Factors that might cause such a difference include: the effect of pandemics, including the negative impacts and disruptions on the communities we serve, and the domestic and global economy, which may have an adverse effect on our business; current and future economic and market conditions, including the effects of declines in housing prices, high unemployment rates,
Additional Information and Where to Find It
In connection with the proposed transaction, Burke & Herbert filed a registration statement on Form S-4 with the
The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF BURKE & HERBERT AND SUMMIT AND THEIR RESPECTIVE AFFILIATES ARE URGED TO READ, THE REGISTRATION STATEMENT ON FORM S-4, THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON FORM S-4 AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC IN CONNECTION WITH THE PROPOSED TRANSACTION, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT BURKE & HERBERT, SUMMIT AND THE PROPOSED TRANSACTION. Investors and shareholders will be able to obtain a free copy of the registration statement, including the joint proxy statement/prospectus, as well as other relevant documents filed with the
Participants in Solicitation
Burke & Herbert, Summit, and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction under the rules of the
Quarterly Performance Summary (unaudited) | |||||||||
Q3 2023 vs Q3 2022 | |||||||||
For the Quarter Ended | Percent | ||||||||
Dollars in thousands | Change | ||||||||
Statements of Income | |||||||||
Interest income | |||||||||
Loans, including fees | $ | 58,102 | $ | 38,784 | 49.8 | % | |||
Securities | 6,357 | 3,497 | 81.8 | % | |||||
Other | 235 | 170 | 38.2 | % | |||||
Total interest income | 64,694 | 42,451 | 52.4 | % | |||||
Interest expense | |||||||||
Deposits | 19,924 | 6,140 | 224.5 | % | |||||
Borrowings | 3,497 | 2,198 | 59.1 | % | |||||
Total interest expense | 23,421 | 8,338 | 180.9 | % | |||||
Net interest income | 41,273 | 34,113 | 21.0 | % | |||||
Provision for credit losses | 1,250 | 1,500 | -16.7 | % | |||||
Net interest income after provision | |||||||||
for credit losses | 40,023 | 32,613 | 22.7 | % | |||||
Noninterest income | |||||||||
Trust and wealth management fees | 819 | 725 | 13.0 | % | |||||
Mortgage origination revenue | 172 | 538 | -68.0 | % | |||||
Service charges on deposit accounts | 1,775 | 1,550 | 14.5 | % | |||||
Bank card revenue | 1,907 | 1,639 | 16.4 | % | |||||
Net gains on equity investments | 180 | 283 | -36.4 | % | |||||
Net realized losses on debt securities | (12 | ) | (242 | ) | -95.0 | % | |||
Bank owned life insurance and annuity income | 311 | 229 | 35.8 | % | |||||
Other income | 113 | 165 | -31.5 | % | |||||
Total noninterest income | 5,265 | 4,887 | 7.7 | % | |||||
Noninterest expense | |||||||||
Salaries and employee benefits | 11,959 | 10,189 | 17.4 | % | |||||
Net occupancy expense | 1,436 | 1,301 | 10.4 | % | |||||
Equipment expense | 2,361 | 1,851 | 27.6 | % | |||||
Professional fees | 400 | 372 | 7.5 | % | |||||
Advertising and public relations | 247 | 276 | -10.5 | % | |||||
Amortization of intangibles | 998 | 354 | 181.9 | % | |||||
716 | 292 | 145.2 | % | ||||||
Bank card expense | 972 | 726 | 33.9 | % | |||||
Foreclosed properties expense, net of (gains)/losses | 10 | 26 | -61.5 | % | |||||
Acquisition-related expense | 1,110 | - | n/m | ||||||
Other expenses | 3,953 | 3,834 | 3.1 | % | |||||
Total noninterest expense | 24,162 | 19,221 | 25.7 | % | |||||
Income before income taxes | 21,126 | 18,279 | 15.6 | % | |||||
Income taxes | 4,794 | 3,856 | 24.3 | % | |||||
Net income | 16,332 | 14,423 | 13.2 | % | |||||
Preferred stock dividends | 225 | 225 | n/a | ||||||
Net income applicable to common shares | $ | 16,107 | $ | 14,198 | 13.4 | % |
Quarterly Performance Summary (unaudited) | |||||||||
Q3 2023 vs Q3 2022 | |||||||||
For the Quarter Ended | Percent | ||||||||
Change | |||||||||
Per Share Data | |||||||||
Earnings per common share | |||||||||
Basic | $ | 1.10 | $ | 1.11 | -0.9 | % | |||
Diluted | $ | 1.09 | $ | 1.11 | -1.8 | % | |||
Cash dividends per common share | $ | 0.22 | $ | 0.20 | 10.0 | % | |||
Common stock dividend payout ratio | 19.8 | % | 17.7 | % | 11.5 | % | |||
Average common shares outstanding | |||||||||
Basic | 14,672,176 | 12,766,473 | 14.9 | % | |||||
Diluted | 14,714,211 | 12,835,670 | 14.6 | % | |||||
Common shares outstanding at period end | 14,674,852 | 12,774,645 | 14.9 | % | |||||
Performance Ratios | |||||||||
Return on average equity | 15.66 | % | 17.05 | % | -8.2 | % | |||
Return on average tangible equity ( | 20.03 | % | 21.33 | % | -6.1 | % | |||
Return on average tangible common equity (D)(E) | 20.95 | % | 22.20 | % | -5.6 | % | |||
Return on average assets | 1.42 | % | 1.51 | % | -6.0 | % | |||
Net interest margin (A) | 3.88 | % | 3.84 | % | 1.0 | % | |||
Efficiency ratio (B) | 47.15 | % | 47.95 | % | -1.7 | % | |||
NOTES
(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) – Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).
(E) – See Non-GAAP Financial Measures for additional information relating to the calculation of this item.
Nine Month Performance Summary (unaudited) | |||||||||
2023 vs 2022 | |||||||||
For the Nine Months Ended | Percent | ||||||||
Dollars in thousands | Change | ||||||||
Statements of Income | |||||||||
Interest income | |||||||||
Loans, including fees | $ | 157,999 | $ | 101,774 | 55.2 | % | |||
Securities | 17,423 | 8,871 | 96.4 | % | |||||
Other | 610 | 262 | 132.8 | % | |||||
Total interest income | 176,032 | 110,907 | 58.7 | % | |||||
Interest expense | |||||||||
Deposits | 51,775 | 10,489 | 393.6 | % | |||||
Borrowings | 8,481 | 5,785 | 46.6 | % | |||||
Total interest expense | 60,256 | 16,274 | 270.3 | % | |||||
Net interest income | 115,776 | 94,633 | 22.3 | % | |||||
Provision for credit losses | 10,750 | 5,450 | 97.2 | % | |||||
Net interest income after provision | |||||||||
for credit losses | 105,026 | 89,183 | 17.8 | % | |||||
Noninterest income | |||||||||
Trust and wealth management fees | 2,484 | 2,228 | 11.5 | % | |||||
Mortgage origination revenue | 513 | 1,194 | -57.0 | % | |||||
Service charges on deposit accounts | 5,110 | 4,625 | 10.5 | % | |||||
Bank card revenue | 5,462 | 4,748 | 15.0 | % | |||||
Net gains/(losses) on equity investments | 375 | (14 | ) | n/m | |||||
Net realized losses on debt securities, net | (282 | ) | (684 | ) | -58.8 | % | |||
Bank owned life insurance and annuity income | 1,078 | 843 | 27.9 | % | |||||
Other income | 334 | 348 | -4.0 | % | |||||
Total noninterest income | 15,074 | 13,288 | 13.4 | % | |||||
Noninterest expense | |||||||||
Salaries and employee benefits | 34,922 | 29,920 | 16.7 | % | |||||
Net occupancy expense | 4,297 | 3,801 | 13.0 | % | |||||
Equipment expense | 6,752 | 5,484 | 23.1 | % | |||||
Professional fees | 1,246 | 1,242 | 0.3 | % | |||||
Advertising and public relations | 681 | 613 | 11.1 | % | |||||
Amortization of intangibles | 2,340 | 1,088 | 115.1 | % | |||||
1,788 | 872 | 105.0 | % | ||||||
Bank card expense | 2,620 | 2,249 | 16.5 | % | |||||
Foreclosed properties expense, net of (gains)/losses | 73 | 77 | -5.2 | % | |||||
Acquisition-related expense | 5,604 | 33 | n/m | ||||||
Other expenses | 10,563 | 8,651 | 22.1 | % | |||||
Total noninterest expense | 70,886 | 54,030 | 31.2 | % | |||||
Income before income taxes | 49,214 | 48,441 | 1.6 | % | |||||
Income taxes | 10,572 | 10,311 | 2.5 | % | |||||
Net income | 38,642 | 38,130 | 1.3 | % | |||||
Preferred stock dividends | 675 | 675 | 0.0 | % | |||||
Net income applicable to common shares | $ | 37,967 | $ | 37,455 | 1.4 | % |
Nine Month Performance Summary (unaudited) | |||||||||
2023 vs 2022 | |||||||||
For the Nine Months Ended | Percent | ||||||||
Change | |||||||||
Per Share Data | |||||||||
Earnings per common share | |||||||||
Basic | $ | 2.70 | $ | 2.94 | -8.2 | % | |||
Diluted | $ | 2.69 | $ | 2.92 | -7.9 | % | |||
Cash dividends per common share | $ | 0.62 | $ | 0.56 | 10.7 | % | |||
Common stock dividend payout ratio | 22.6 | % | 18.7 | % | 20.7 | % | |||
Average common shares outstanding | |||||||||
Basic | 14,048,567 | 12,755,576 | 10.1 | % | |||||
Diluted | 14,090,796 | 12,815,365 | 10.0 | % | |||||
Common shares outstanding at period end | 14,674,852 | 12,774,645 | 14.9 | % | |||||
Performance Ratios | |||||||||
Return on average equity | 12.97 | % | 15.26 | % | -15.0 | % | |||
Return on average tangible equity ( | 17.60 | % | 19.23 | % | -8.5 | % | |||
Return on average tangible common equity (D) (E) | 17.42 | % | 20.00 | % | -12.9 | % | |||
Return on average assets | 1.18 | % | 1.37 | % | -13.9 | % | |||
Net interest margin (A) | 3.87 | % | 3.71 | % | 4.3 | % | |||
Efficiency ratio (B) | 47.66 | % | 48.25 | % | -1.2 | % | |||
NOTES
(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) – Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income applicable to common shares + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).
(E) – See Non-GAAP Financial Measures for additional information relating to the calculation of this item.
Five Quarter Performance Summary (unaudited) | ||||||||||||||||
For the Quarter Ended | ||||||||||||||||
Dollars in thousands | ||||||||||||||||
Statements of Income | ||||||||||||||||
Interest income | ||||||||||||||||
Loans, including fees | $ | 58,102 | $ | 54,413 | $ | 45,485 | $ | 43,589 | $ | 38,784 | ||||||
Securities | 6,357 | 6,247 | 4,819 | 4,181 | 3,497 | |||||||||||
Other | 235 | 203 | 171 | 70 | 170 | |||||||||||
Total interest income | 64,694 | 60,863 | 50,475 | 47,840 | 42,451 | |||||||||||
Interest expense | ||||||||||||||||
Deposits | 19,924 | 17,851 | 14,000 | 10,194 | 6,140 | |||||||||||
Borrowings | 3,497 | 2,699 | 2,286 | 3,293 | 2,198 | |||||||||||
Total interest expense | 23,421 | 20,550 | 16,286 | 13,487 | 8,338 | |||||||||||
Net interest income | 41,273 | 40,313 | 34,189 | 34,353 | 34,113 | |||||||||||
Provision for credit losses | 1,250 | 8,000 | 1,500 | 1,500 | 1,500 | |||||||||||
Net interest income after provision | ||||||||||||||||
for credit losses | 40,023 | 32,313 | 32,689 | 32,853 | 32,613 | |||||||||||
Noninterest income | ||||||||||||||||
Trust and wealth management fees | 819 | 854 | 811 | 750 | 725 | |||||||||||
Mortgage origination revenue | 172 | 169 | 171 | 286 | 538 | |||||||||||
Service charges on deposit accounts | 1,775 | 1,943 | 1,392 | 1,526 | 1,550 | |||||||||||
Bank card revenue | 1,907 | 1,987 | 1,568 | 1,513 | 1,639 | |||||||||||
Net gains on equity investments | 180 | 150 | 45 | 280 | 283 | |||||||||||
Net realized losses on debt securities | (12 | ) | (211 | ) | (59 | ) | (24 | ) | (242 | ) | ||||||
Bank owned life insurance and annuity income | 311 | 431 | 336 | 367 | 229 | |||||||||||
Other income | 113 | 100 | 122 | 167 | 165 | |||||||||||
Total noninterest income | 5,265 | 5,423 | 4,386 | 4,865 | 4,887 | |||||||||||
Noninterest expense | ||||||||||||||||
Salaries and employee benefits | 11,959 | 12,156 | 10,807 | 10,532 | 10,189 | |||||||||||
Net occupancy expense | 1,436 | 1,528 | 1,333 | 1,328 | 1,301 | |||||||||||
Equipment expense | 2,361 | 2,361 | 2,030 | 1,769 | 1,851 | |||||||||||
Professional fees | 400 | 471 | 376 | 386 | 372 | |||||||||||
Advertising and public relations | 247 | 264 | 170 | 280 | 276 | |||||||||||
Amortization of intangibles | 998 | 999 | 343 | 351 | 354 | |||||||||||
716 | 742 | 330 | 352 | 292 | ||||||||||||
Bank card expense | 972 | 951 | 696 | 679 | 726 | |||||||||||
Foreclosed properties expense, net of (gains)/losses | 10 | 48 | 15 | 159 | 26 | |||||||||||
Acquisition-related expenses | 1,110 | 4,163 | 331 | 81 | - | |||||||||||
Other expenses | 3,953 | 3,641 | 2,968 | 2,932 | 3,834 | |||||||||||
Total noninterest expense | 24,162 | 27,324 | 19,399 | 18,849 | 19,221 | |||||||||||
Income before income taxes | 21,126 | 10,412 | 17,676 | 18,869 | 18,279 | |||||||||||
Income tax expense | 4,794 | 2,203 | 3,575 | 3,783 | 3,856 | |||||||||||
Net income | 16,332 | 8,209 | 14,101 | 15,086 | 14,423 | |||||||||||
Preferred stock dividends | 225 | 225 | 225 | 225 | 225 | |||||||||||
Net income applicable to common shares | $ | 16,107 | $ | 7,984 | $ | 13,876 | $ | 14,861 | $ | 14,198 |
Five Quarter Performance Summary (unaudited) | ||||||||||||||||
For the Quarter Ended | ||||||||||||||||
Per Share Data | ||||||||||||||||
Earnings per common share | ||||||||||||||||
Basic | $ | 1.10 | $ | 0.54 | $ | 1.09 | $ | 1.16 | $ | 1.11 | ||||||
Diluted | $ | 1.09 | $ | 0.54 | $ | 1.08 | $ | 1.16 | $ | 1.11 | ||||||
Cash dividends per common share | $ | 0.22 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | ||||||
Common stock dividend payout ratio | 19.8 | % | 36.7 | % | 18.1 | % | 16.9 | % | 17.7 | % | ||||||
Average common shares outstanding | ||||||||||||||||
Basic | 14,672,176 | 14,668,923 | 12,783,851 | 12,775,703 | 12,766,473 | |||||||||||
Diluted | 14,714,211 | 14,703,636 | 12,830,102 | 12,837,637 | 12,835,670 | |||||||||||
Common shares outstanding at period end | 14,674,852 | 14,672,147 | 12,786,404 | 12,783,646 | 12,774,645 | |||||||||||
Performance Ratios | ||||||||||||||||
Return on average equity | 15.66 | % | 7.99 | % | 15.55 | % | 17.50 | % | 17.05 | % | ||||||
Return on average tangible equity ( | 20.03 | % | 10.86 | % | 19.10 | % | 21.75 | % | 21.33 | % | ||||||
Return on average tangible common equity (D)(E) | 20.95 | % | 11.37 | % | 20.10 | % | 22.96 | % | 22.20 | % | ||||||
Return on average assets | 1.42 | % | 0.73 | % | 1.43 | % | 1.54 | % | 1.51 | % | ||||||
Net interest margin (A) | 3.88 | % | 3.89 | % | 3.83 | % | 3.80 | % | 3.84 | % | ||||||
Efficiency ratio (B) | 47.15 | % | 47.90 | % | 48.00 | % | 46.40 | % | 47.95 | % |
NOTES
(A) – Presented on a tax-equivalent basis assuming a federal tax rate of 21%.
(B) – Computed on a tax equivalent basis excluding acquisition-related expenses, gains/losses on sales of assets, write-downs of OREO properties to fair value and amortization of intangibles.
(C) – Return on average tangible equity = (Net income + Amortization of intangibles [after-tax]) / (Average shareholders’ equity – Average intangible assets).
(D) – Return on average tangible common equity = (Net income + Amortization of intangibles [after-tax]) / (Average common shareholders’ equity – Average intangible assets).
(E) – See Non-GAAP Financial Measures for additional information relating to the calculation of this item.
Selected Balance Sheet Data (unaudited) | ||||||||||||||||
Dollars in thousands, except per share amounts | ||||||||||||||||
Assets | ||||||||||||||||
Cash and due from banks | $ | 23,159 | $ | 23,341 | $ | 16,488 | $ | 16,469 | $ | 16,141 | ||||||
Interest bearing deposits other banks | 36,398 | 39,902 | 54,328 | 28,248 | 29,510 | |||||||||||
Debt securities, available for sale | 511,403 | 512,038 | 431,933 | 405,201 | 383,965 | |||||||||||
Debt securities, held to maturity | 94,715 | 95,200 | 95,682 | 96,163 | 96,640 | |||||||||||
Equity investments | 31,241 | 30,818 | 29,867 | 29,494 | 20,314 | |||||||||||
Other investments | 19,579 | 16,014 | 12,696 | 16,029 | 18,105 | |||||||||||
Loans, net | 3,551,686 | 3,506,880 | 3,059,099 | 3,043,919 | 3,038,377 | |||||||||||
Property held for sale | 4,505 | 4,742 | 5,128 | 5,067 | 5,193 | |||||||||||
Premises and equipment, net | 62,721 | 60,967 | 54,491 | 53,981 | 54,628 | |||||||||||
75,425 | 76,423 | 61,807 | 62,150 | 62,502 | ||||||||||||
Cash surrender value of life insurance policies and annuities | 85,076 | 84,790 | 72,019 | 71,640 | 71,216 | |||||||||||
Derivative financial instruments | 44,527 | 39,951 | 34,758 | 40,506 | 42,179 | |||||||||||
Other assets | 63,773 | 61,204 | 49,111 | 47,825 | 48,529 | |||||||||||
Total assets | $ | 4,604,208 | $ | 4,552,270 | $ | 3,977,407 | $ | 3,916,692 | $ | 3,887,299 | ||||||
Liabilities and Shareholders' Equity | ||||||||||||||||
Deposits | $ | 3,754,495 | $ | 3,735,034 | $ | 3,299,846 | $ | 3,169,879 | $ | 3,108,072 | ||||||
Short-term borrowings | 258,054 | 232,150 | 140,150 | 225,999 | 273,148 | |||||||||||
Long-term borrowings and | ||||||||||||||||
subordinated debentures, net | 123,892 | 123,776 | 123,660 | 123,543 | 123,427 | |||||||||||
Other liabilities | 51,315 | 48,136 | 44,205 | 42,741 | 40,978 | |||||||||||
Total liabilities | 4,187,756 | 4,139,096 | 3,607,861 | 3,562,162 | 3,545,625 | |||||||||||
Preferred stock and related surplus | 14,920 | 14,920 | 14,920 | 14,920 | 14,920 | |||||||||||
Common stock and related surplus | 130,508 | 130,227 | 90,939 | 90,696 | 90,345 | |||||||||||
Retained earnings | 289,641 | 276,762 | 271,712 | 260,393 | 248,084 | |||||||||||
Accumulated other comprehensive income (loss) | (18,617 | ) | (8,735 | ) | (8,025 | ) | (11,479 | ) | (11,675 | ) | ||||||
Total shareholders' equity | 416,452 | 413,174 | 369,546 | 354,530 | 341,674 | |||||||||||
Total liabilities and shareholders' equity | $ | 4,604,208 | $ | 4,552,270 | $ | 3,977,407 | $ | 3,916,692 | $ | 3,887,299 | ||||||
Book value per common share | $ | 27.36 | $ | 27.14 | $ | 27.73 | $ | 26.57 | $ | 25.58 | ||||||
Tangible book value per common share (A)(C) | $ | 22.22 | $ | 21.93 | $ | 22.90 | $ | 21.70 | $ | 20.69 | ||||||
Tangible common equity to tangible assets (B)(C) | 7.2 | % | 7.2 | % | 7.5 | % | 7.2 | % | 6.9 | % | ||||||
NOTES
(A) – Tangible book value per share = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / Common shares outstanding.
(B) – Tangible common equity to tangible assets = (Common stock and related surplus plus Retained earnings plus Accumulated other comprehensive income/loss – Intangible assets) / (Total assets – Intangible assets).
(C) – See Non-GAAP Financial Measures for additional information relating to the calculation of this item.
Loan Composition (unaudited) | |||||||||||||||
Dollars in thousands | |||||||||||||||
Commercial | $ | 511,951 | $ | 511,457 | $ | 498,268 | $ | 501,844 | $ | 512,771 | |||||
Mortgage warehouse lines | 114,734 | 118,785 | 86,240 | 130,390 | 194,740 | ||||||||||
Commercial real estate | |||||||||||||||
Owner occupied | 547,886 | 566,447 | 469,560 | 467,050 | 473,298 | ||||||||||
Non-owner occupied | 1,217,029 | 1,193,927 | 1,036,358 | 1,004,368 | 960,627 | ||||||||||
Construction and development | |||||||||||||||
Land and development | 114,354 | 117,371 | 102,351 | 106,362 | 104,437 | ||||||||||
Construction | 349,049 | 309,709 | 290,556 | 282,935 | 248,564 | ||||||||||
Residential real estate | |||||||||||||||
Conventional | 497,076 | 483,998 | 395,312 | 386,874 | 382,203 | ||||||||||
Jumbo | 113,837 | 117,219 | 111,475 | 92,103 | 87,449 | ||||||||||
Home equity | 81,967 | 86,050 | 70,167 | 71,986 | 72,756 | ||||||||||
Consumer | 44,288 | 44,429 | 36,531 | 35,372 | 35,116 | ||||||||||
Other | 6,748 | 3,169 | 3,117 | 3,534 | 3,166 | ||||||||||
Total loans, net of unearned fees | 3,598,919 | 3,552,561 | 3,099,935 | 3,082,818 | 3,075,127 | ||||||||||
Less allowance for loan credit losses | 47,233 | 45,681 | 40,836 | 38,899 | 36,750 | ||||||||||
Loans, net | $ | 3,551,686 | $ | 3,506,880 | $ | 3,059,099 | $ | 3,043,919 | $ | 3,038,377 | |||||
Unfunded loan commitments | $ | 943,508 | $ | 957,278 | $ | 907,757 | $ | 925,657 | $ | 889,854 | |||||
Deposit Composition (unaudited) | |||||||||||||||
Dollars in thousands | |||||||||||||||
Core deposits | |||||||||||||||
Non-interest bearing checking | $ | 630,055 | $ | 679,139 | $ | 552,716 | $ | 553,616 | $ | 619,067 | |||||
Interest bearing checking | 2,144,737 | 2,024,341 | 1,886,011 | 1,743,299 | 1,475,643 | ||||||||||
Savings | 477,348 | 512,129 | 462,631 | 496,751 | 582,922 | ||||||||||
Time deposits | 469,530 | 465,026 | 327,037 | 343,423 | 397,662 | ||||||||||
Total core deposits | 3,721,670 | 3,680,635 | 3,228,395 | 3,137,089 | 3,075,294 | ||||||||||
Brokered time deposits | 32,825 | 54,399 | 71,451 | 32,790 | 32,778 | ||||||||||
Total deposits | $ | 3,754,495 | $ | 3,735,034 | $ | 3,299,846 | $ | 3,169,879 | $ | 3,108,072 | |||||
Estimated uninsured deposits (A) | $ | 1,283,610 | $ | 1,189,908 | $ | 933,703 | $ | 946,188 | $ | 757,038 | |||||
(A) - Excludes uninsured public funds otherwise secured or collateralized as required by law
Regulatory Capital Ratios (unaudited) | |||||||||||
CET1 Risk-based Capital | 8.9 | % | 8.7 | % | 8.9 | % | 8.6 | % | 8.2 | % | |
Tier 1 Risk-based Capital | 9.7 | % | 9.5 | % | 9.8 | % | 9.5 | % | 9.2 | % | |
Total Risk-based Capital | 13.5 | % | 13.3 | % | 14.0 | % | 13.5 | % | 13.1 | % | |
Tier 1 Leverage | 8.5 | % | 8.4 | % | 8.7 | % | 8.5 | % | 8.4 | % | |
CET1 Risk-based Capital | 11.6 | % | 11.3 | % | 11.9 | % | 11.6 | % | 11.3 | % | |
Tier 1 Risk-based Capital | 11.6 | % | 11.3 | % | 11.9 | % | 11.6 | % | 11.3 | % | |
Total Risk-based Capital | 12.7 | % | 12.5 | % | 13.1 | % | 12.6 | % | 12.2 | % | |
Tier 1 Leverage | 10.1 | % | 9.9 | % | 10.6 | % | 10.4 | % | 10.3 | % | |
Asset Quality Information (unaudited) | ||||||||||||||||
For the Quarter Ended | ||||||||||||||||
Dollars in thousands | ||||||||||||||||
Gross loan charge-offs | $ | 226 | $ | 4,009 | $ | 164 | $ | 250 | $ | 265 | ||||||
Gross loan recoveries | (108 | ) | (118 | ) | (227 | ) | (249 | ) | (257 | ) | ||||||
Net loan charge-offs | $ | 118 | $ | 3,891 | $ | (63 | ) | $ | 1 | $ | 8 | |||||
Net loan charge-offs to average loans (annualized) | 0.01 | % | 0.44 | % | -0.01 | % | 0.00 | % | 0.00 | % | ||||||
Allowance for loan credit losses | $ | 47,233 | $ | 45,681 | $ | 40,836 | $ | 38,899 | $ | 36,750 | ||||||
Allowance for loan credit losses as a percentage | ||||||||||||||||
of period end loans | 1.31 | % | 1.29 | % | 1.32 | % | 1.26 | % | 1.19 | % | ||||||
Allowance for credit losses on | ||||||||||||||||
unfunded loan commitments ("ULC") | $ | 6,912 | $ | 7,332 | $ | 6,572 | $ | 6,947 | $ | 7,597 | ||||||
Allowance for credit losses on ULC | ||||||||||||||||
as a percentage of period end ULC | 0.73 | % | 0.81 | % | 0.72 | % | 0.75 | % | 0.85 | % | ||||||
Nonperforming assets: | ||||||||||||||||
Nonperforming loans | ||||||||||||||||
Commercial | $ | 783 | $ | 254 | $ | 402 | $ | 93 | $ | 347 | ||||||
Commercial real estate | 6,402 | 5,970 | 1,700 | 1,750 | 1,860 | |||||||||||
Residential construction and development | 750 | 772 | 813 | 851 | 902 | |||||||||||
Residential real estate | 4,787 | 4,298 | 4,322 | 5,117 | 6,083 | |||||||||||
Consumer | 124 | 46 | 65 | 12 | 8 | |||||||||||
Total nonperforming loans | 12,846 | 11,340 | 7,302 | 7,823 | 9,200 | |||||||||||
Foreclosed properties | ||||||||||||||||
Commercial real estate | 297 | 297 | 297 | 297 | 297 | |||||||||||
Commercial construction and development | 2,187 | 2,187 | 2,187 | 2,187 | 2,332 | |||||||||||
Residential construction and development | 1,924 | 2,161 | 2,293 | 2,293 | 2,293 | |||||||||||
Residential real estate | 97 | 97 | 351 | 290 | 271 | |||||||||||
Total foreclosed properties | 4,505 | 4,742 | 5,128 | 5,067 | 5,193 | |||||||||||
Total nonperforming assets | $ | 17,351 | $ | 16,082 | $ | 12,430 | $ | 12,890 | $ | 14,393 | ||||||
Nonperforming loans to period end loans | 0.36 | % | 0.32 | % | 0.24 | % | 0.25 | % | 0.30 | % | ||||||
Nonperforming assets to period end assets | 0.38 | % | 0.35 | % | 0.31 | % | 0.33 | % | 0.37 | % | ||||||
Loans Past Due 30-89 Days (unaudited) | ||||||||||||||||
Dollars in thousands | ||||||||||||||||
Commercial | $ | 3,300 | $ | 1,006 | $ | 463 | $ | 3,168 | $ | 1,329 | ||||||
Commercial real estate | 781 | 513 | 1,000 | 641 | 1,550 | |||||||||||
Construction and development | 793 | 161 | 3,459 | 317 | 236 | |||||||||||
Residential real estate | 4,620 | 4,933 | 2,311 | 6,231 | 2,824 | |||||||||||
Consumer | 440 | 389 | 252 | 253 | 216 | |||||||||||
Other | 37 | 17 | 13 | 22 | 4 | |||||||||||
Total | $ | 9,971 | $ | 7,019 | $ | 7,498 | $ | 10,632 | $ | 6,159 | ||||||
Average Balance Sheet, Interest Earnings & Expenses and Average Rates | ||||||||||||||||||||||||||
Q3 2023 vs Q2 2023 vs Q3 2022 (unaudited) | ||||||||||||||||||||||||||
Q3 2023 | Q2 2023 | Q3 2022 | ||||||||||||||||||||||||
Average | Earnings / | Yield / | Average | Earnings / | Yield / | Average | Earnings / | Yield / | ||||||||||||||||||
Dollars in thousands | Balances | Expense | Rate | Balances | Expense | Rate | Balances | Expense | Rate | |||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Interest earning assets | ||||||||||||||||||||||||||
Loans, net of unearned interest (1) | ||||||||||||||||||||||||||
Taxable | $ | 3,591,583 | $ | 58,040 | 6.41 | % | $ | 3,516,306 | $ | 54,374 | 6.20 | % | $ | 3,018,219 | $ | 38,741 | 5.09 | % | ||||||||
Tax-exempt (2) | 3,911 | 78 | 7.91 | % | 4,144 | 49 | 4.74 | % | 4,834 | 54 | 4.43 | % | ||||||||||||||
Securities | ||||||||||||||||||||||||||
Taxable | 417,299 | 4,972 | 4.73 | % | 428,039 | 4,900 | 4.59 | % | 283,645 | 2,273 | 3.18 | % | ||||||||||||||
Tax-exempt (2) | 211,150 | 1,754 | 3.30 | % | 209,931 | 1,705 | 3.26 | % | 203,951 | 1,549 | 3.01 | % | ||||||||||||||
Interest bearing deposits other banks | ||||||||||||||||||||||||||
and Federal funds sold | 39,200 | 235 | 2.38 | % | 35,218 | 203 | 2.31 | % | 49,048 | 170 | 1.38 | % | ||||||||||||||
Total interest earning assets | 4,263,143 | 65,079 | 6.06 | % | 4,193,638 | 61,231 | 5.86 | % | 3,559,697 | 42,787 | 4.77 | % | ||||||||||||||
Noninterest earning assets | ||||||||||||||||||||||||||
Cash & due from banks | 24,229 | 23,588 | 17,455 | |||||||||||||||||||||||
Premises & equipment | 62,085 | 60,872 | 54,976 | |||||||||||||||||||||||
Intangible assets | 76,037 | 80,445 | 62,705 | |||||||||||||||||||||||
Other assets | 219,150 | 212,104 | 171,409 | |||||||||||||||||||||||
Allowance for loan credit losses | (46,498 | ) | (44,312 | ) | (35,381 | ) | ||||||||||||||||||||
Total assets | $ | 4,598,146 | $ | 4,526,335 | $ | 3,830,861 | ||||||||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Interest bearing liabilities | ||||||||||||||||||||||||||
Interest bearing | ||||||||||||||||||||||||||
demand deposits | 2,057,035 | 15,053 | 2.90 | % | 1,985,134 | 13,423 | 2.71 | % | $ | 1,454,815 | $ | 4,276 | 1.17 | % | ||||||||||||
Savings deposits | 493,565 | 2,035 | 1.64 | % | 528,694 | 2,000 | 1.52 | % | 611,075 | 1,243 | 0.81 | % | ||||||||||||||
Time deposits | 505,824 | 2,836 | 2.22 | % | 513,236 | 2,428 | 1.90 | % | 461,134 | 621 | 0.53 | % | ||||||||||||||
Short-term borrowings | 267,935 | 1,988 | 2.94 | % | 207,418 | 1,212 | 2.34 | % | 191,421 | 850 | 1.76 | % | ||||||||||||||
Long-term borrowings and | ||||||||||||||||||||||||||
subordinated debentures | 123,839 | 1,509 | 4.83 | % | 123,843 | 1,487 | 4.82 | % | 123,368 | 1,348 | 4.34 | % | ||||||||||||||
Total interest bearing liabilities | 3,448,198 | 23,421 | 2.69 | % | 3,358,325 | 20,550 | 2.45 | % | 2,841,813 | 8,338 | 1.16 | % | ||||||||||||||
Noninterest bearing liabilities | . | |||||||||||||||||||||||||
Demand deposits | 681,035 | 706,391 | 609,424 | |||||||||||||||||||||||
Other liabilities | 51,669 | 50,863 | 41,339 | |||||||||||||||||||||||
Total liabilities | 4,180,902 | 4,115,579 | 3,492,576 | |||||||||||||||||||||||
Shareholders' equity - preferred | 14,920 | 14,920 | 14,920 | |||||||||||||||||||||||
Shareholders' equity - common | 402,324 | 395,836 | 323,365 | |||||||||||||||||||||||
Total liabilities and | ||||||||||||||||||||||||||
shareholders' equity | $ | 4,598,146 | $ | 4,526,335 | $ | 3,830,861 | ||||||||||||||||||||
NET INTEREST EARNINGS | $ | 41,658 | $ | 40,681 | $ | 34,449 | ||||||||||||||||||||
NET INTEREST MARGIN | 3.88 | % | 3.89 | % | 3.84 | % | ||||||||||||||||||||
(1) - For purposes of this table, nonaccrual loans are included in average loan balances. | ||||||||||||||||||||||||||
(2) - Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented. | ||||||||||||||||||||||||||
The tax equivalent adjustment resulted in an increase in interest income of | ||||||||||||||||||||||||||
Q2 2023 and Q3 2022, respectively. | ||||||||||||||||||||||||||
Average Balance Sheet, Interest Earnings & Expenses and Average Rates | ||||||||||||||||||
YTD 2023 vs YTD 2022 (unaudited) | ||||||||||||||||||
YTD 2023 | YTD 2022 | |||||||||||||||||
Average | Earnings / | Yield / | Average | Earnings / | Yield / | |||||||||||||
Dollars in thousands | Balances | Expense | Rate | Balances | Expense | Rate | ||||||||||||
ASSETS | ||||||||||||||||||
Interest earning assets | ||||||||||||||||||
Loans, net of unearned interest (1) | ||||||||||||||||||
Taxable | $ | 3,400,167 | $ | 157,813 | 6.21 | % | $ | 2,898,380 | $ | 101,640 | 4.69 | % | ||||||
Tax-exempt (2) | 4,706 | 235 | 6.68 | % | 5,108 | 170 | 4.45 | % | ||||||||||
Securities | ||||||||||||||||||
Taxable | 386,825 | 13,283 | 4.59 | % | 300,371 | 5,695 | 2.53 | % | ||||||||||
Tax-exempt (2) | 212,484 | 5,241 | 3.30 | % | 187,575 | 4,021 | 2.87 | % | ||||||||||
Interest bearing deposits other banks | ||||||||||||||||||
and Federal funds sold | 36,261 | 610 | 2.25 | % | 53,142 | 262 | 0.66 | % | ||||||||||
Total interest earning assets | 4,040,443 | 177,182 | 5.86 | % | 3,444,576 | 111,788 | 4.34 | % | ||||||||||
Noninterest earning assets | ||||||||||||||||||
Cash & due from banks | 21,766 | 17,671 | ||||||||||||||||
Premises & equipment | 59,053 | 55,486 | ||||||||||||||||
Intangible assets | 72,887 | 63,061 | ||||||||||||||||
Other assets | 207,111 | 159,912 | ||||||||||||||||
Allowance for loan credit losses | (43,466 | ) | (33,705 | ) | ||||||||||||||
Total assets | $ | 4,357,794 | $ | 3,707,001 | ||||||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||||||
Liabilities | ||||||||||||||||||
Interest bearing liabilities | ||||||||||||||||||
Interest bearing | ||||||||||||||||||
demand deposits | $ | 1,954,761 | $ | 39,276 | 2.69 | % | $ | 1,260,907 | $ | 6,015 | 0.64 | % | ||||||
Savings deposits | 500,647 | 5,949 | 1.59 | % | 660,855 | 2,505 | 0.51 | % | ||||||||||
Time deposits | 469,864 | 6,550 | 1.86 | % | 506,654 | 1,969 | 0.52 | % | ||||||||||
Short-term borrowings | 214,322 | 4,024 | 2.51 | % | 179,813 | 1,918 | 1.43 | % | ||||||||||
Long-term borrowings and | ||||||||||||||||||
subordinated debentures | 123,717 | 4,457 | 4.82 | % | 123,279 | 3,867 | 4.19 | % | ||||||||||
3,263,311 | 60,256 | 2.47 | % | 2,731,508 | 16,274 | 0.80 | % | |||||||||||
Noninterest bearing liabilities | ||||||||||||||||||
Demand deposits | 648,789 | 600,766 | ||||||||||||||||
Other liabilities | 48,554 | 41,541 | ||||||||||||||||
Total liabilities | 3,960,654 | 3,373,815 | ||||||||||||||||
Shareholders' equity - preferred | 14,920 | 14,920 | ||||||||||||||||
Shareholders' equity - common | 382,220 | 318,266 | ||||||||||||||||
Total liabilities and | ||||||||||||||||||
shareholders' equity | $ | 4,357,794 | $ | 3,707,001 | ||||||||||||||
NET INTEREST EARNINGS | $ | 116,926 | $ | 95,514 | ||||||||||||||
NET INTEREST MARGIN | 3.87 | % | 3.71 | % | ||||||||||||||
(1) - For purposes of this table, nonaccrual loans are included in average loan balances. | ||||||||||||||||||
(2) - Interest income on tax-exempt securities and loans has been adjusted assuming a Federal tax rate of 21% for all periods presented. | ||||||||||||||||||
The tax equivalent adjustment resulted in an increase in interest income of | ||||||||||||||||||
YTD 2023 and YTD 2022 periods, respectively. | ||||||||||||||||||
Contact: | |
Telephone: | (304) 530-0552 |
Email: | rtissue@summitfgi.com |
Source:
2023 GlobeNewswire, Inc., source